BIA/Kelsey: ’18 Local TV Ad Rev To Hit $20.8B

BIA/Kelsey’s new U.S. Local Advertising Forecast 2018 projects total local advertising revenue in the U.S. will reach $151.2 billion in 2018, up from $140.9 billion this year, representing a growth rate of 5.2%. Traditional media will comprise 64.7% of the revenue, with online/digital securing 35.3%.

Local television continues as second largest category (after direct mail) at 13.8% of that $151.2 billion total ($20.8 billion). It also continues to be the largest player (more than 60%) in the local video advertising market. Revenue growth within the total local video advertising segment will come from local mobile video (growing to more than $1 billion) and local online video (increasing to more than $2 billion).

Mobile moves into third place with $19 billion, representing 12.6% of local advertising spend in 2018. This category will grow to 19.2% by 2022. Adoption of mobile local advertising tactics (e.g., geo-fencing, click-to-call and click-to-map) continues to grow among national advertisers that tend to gravitate toward effective, increasingly available and currently undervalued mobile local ad inventory.

“The strong economy and the expectation of highly-competitive statewide political races next year reinforce our outlook that local advertising revenue will show strong growth in 2018, in fact, higher than we’ve seen for five years,” said Mark Fratrik, chief economist and SVP at BIA/Kelsey. “Combine these factors with the continued strength of traditional and online media and the revenue landscape for next year looks robust.”

The forecast also projects significant ad spending in native social advertising next year due to its ability to target and reach local consumers. Social media ad revenues from mobile (not including tablets) now represent about 71% of total social ad spending and will grow to nearly 80% by 2022 as more of the user activity shifts away from desktops.

“Social channels such as Snapchat and Instagram have evolved their mobile native ad models to include new targeting and reporting features, “Fratrik said. “As mobile and social local channels continue to deliver high performance results for advertisers, advertising dollars will flow to these areas. Indeed, pushed by increased consumer use, agencies will budget more of their spending into locally activated mobile products and services.”

BIA/Kelsey’s 2018 U.S. Local Advertising Forecast is a five-year prediction that includes a national overview of total locally activated U.S. ad spending and individual analysis and forecasts for the following media: direct mail, local video (including local over-the-air television, local cable television, out-of-home video, mobile video), out-of-home (OOH), online, radio, social (including breakouts for desktop/tablet and mobile social), mobile (including breakouts for location and non-location targeted mobile media), directories, newspapers and magazines.